State housing sale proposal legal - judge

A housing lobby group has lost its High Court legal battle over a Government proposal to sell Tauranga state houses to a private social housing provider.

Under the proposal, more than 1100 houses will be sold to Accessible Properties, a subsidiary of IHC.

Last month the State Housing Action Coalition's lawyer, Michael Sharp, told the High Court in Wellington the group believed the proposal was illegal and an unreasonable exercise of statutory power.

He said the Ministers of Finance and Housing had not considered the sale contracts, as they were required to before agreeing to the proposal, and the sale did not comply with the relevant statutory provisions.

Justice Simon France ruled on Monday there was no basis to say the ministers' decision was an unreasonable exercise of statutory power.

He said the State Housing Action Coalition disagreed with the decision because it reflected a policy choice the organisation rejected.

Justice France criticised much of the lobby group's evidence.

"In my view, a considerable portion of the plaintiff's evidence is not properly admissible, or is of reduced probative value. Much of it is opinion evidence from persons not qualified as experts to give such evidence for the purposes of High Court proceedings."

The judge said both sides could file memoranda if agreement on costs could not be reached.